Is COMEX Being Cornered?

It is with a deep sense of gratitude that I have had all of you as friends and associates during what has been a long war, not a good war, but a very long “financial war.” As you know from these writings; this has been a war conducted by the Federal Reserve against the entire world, aided and abetted by major international banks via the manipulation of most every market on the planet. The ethics and morals our country was originally built on …be darned!

The events mentioned herein relative to the suppression of gold and silver using dollar hegemony as the tool indicate a major international monetary crisis is dead ahead, this is obvious. Power in the hands of the few have made massive gains for those at the top of the economic ladder while the average man has become a debt slave to the few. There are of course the laws of Mother Nature and “unintended consequences”. Those at the top who intend to “rule the world” are being challenged from the East in what I believe to be almost a winner take all “war.” It did not have to be this way but the “West” has forced this.

I have never written “this is my most important writing ever!” but that day has now come. So many events have all aligned at once which point to something very bad happening, very soon. In fact, “very soon” could be as soon as the Monday following this Thanksgiving. We saw many different events unfold over this past week which I believe are all connected in one way or another, I will try to connect them for you. That said, please understand that we are and have been in a financial war for many years now. This “war” is one between the East and West where the West’s paper financial system which has been in control for so many years is seeing its power wane. It is this “wane” of the West versus the rise of the East that I believe is now, finally coming to head.

If you recall, we had two Fridays in a row where gold and silver prices were smashed early in the overnight hours and into the morning, only to turn around violently and close very strongly for the day and the week. This action is called an “outside reversal day” which over the years has been an extremely rare event in the precious metals. It has been rare in precious metals because it was not “allowed.” When I say “allowed,” please remember that COMEX is a paper exchange where possessing metal is not necessary to sell gold or silver. All you have to have is “money” to post as margin and you are allowed to sell as many contracts as you have margin for. There are “limits” to how many contracts one can buy or hold, these limits do not seem to have been enforced on the sell side …JP Morgan’s short position in silver as an example.

So we had two outside reversal Fridays in a row, this was followed by the action this past Wednesday. 80 tons of gold was sold over a 15 minute timespan which knocked gold down $20 in the blink of an eye. Please see the chart below courtesy of Dave Kranzler of IRD.

80 tons! Let me put this in perspective. 80 tons is equal to two weeks’ worth of global gold production …sold in just 15 minutes! This is nearly 2.8 million ounces. The interesting thing is COMEX only claims to have 865,000 ounces of gold available for delivery so more than 3 times the amount of ounces were sold in 15 minutes than is even claimed as available for delivery! What followed however was the real stunner, very shortly afterward gold dug in its heels and started to recover …recover to unchange in price! Do you see the importance here? Though this was not another outside reversal day, it may have been even more important. The “paper” market absorbed two weeks’ worth of production in just 15 minutes without breaking! I’ll get back to this shortly and tie it in to the rest.

If you recall, I wrote a piece back in August entitled “Kill Switch” where I put forth a hypothesis that the high and rising open interest in silver was actually the Chinese via proxies cornering the silver market. The huge open interest in the nearby contract rolled out to the December contract. At that point, the open interest in gold was at multi year lows as one would expect with prices down. This has changed, just over the last 4-6 weeks, the open interest has steadily built in gold …while continuous pressure still on the price. Before going any further, I have never seen the open interest rise to multiyear highs while the price was pushed to multi year lows in ANY commodity. This is truly an anomaly and one that looks like it could be resolved very shortly.

This coming Friday is the 1st notice day for both Dec. COMEX gold and silver contracts. COMEX in my opinion has a potentially huge problem where a default in both contracts is a distinct possibility! As of this past Friday, 61,763 contracts still open, this represents 308 million ounces of silver. The COMEX claims a registered (deliverable) inventory of just under 65 million ounces. With only four days left there are roughly 5 silver ounces contracted for every one ounce available!

The situation in gold has quietly become much worse than silver, there were 162,509 Dec. gold contracts open which represent over 16 million ounces of gold. The “registered” (deliverable) category at the COMEX inventory shows only 868,910 available to deliver! Do you see the problem here? There are only 4 days left until this contract goes into the delivery process, yet there are 20 ounces contracted for each ounce available! I have one other amusing thought for you, remember the 80 tons sold in 15 minutes last Wednesday? This was almost 2.8 million ounces compared to a deliverable inventory of just 869,000 ounces, in my opinion, “FRAUDULENT” in capital letters!

Yes I understand, there are still four days left for the open interest to bleed down and roll out to the next contract month but we now stand in totally uncharted territory. Never in the past has this much open interest been still outstanding with deliverable inventory as low as it is. It is also astounding that total open interest could have risen to these levels while the price dropped. For open interest to increase and the price to drop, the “initiation” to the opening of contracts has obviously been done by sellers. This is exactly what I have been saying all along, the dropping price has been dictated by paper sales of COMEX contracts …but now there is a problem. So much paper has been sold to dictate the price that the contracts outstanding simply dwarf the available metal to deliver. Put another way, COMEX gold and silver look like they have been cornered! Let me rephrase this, COMEX gold and silver are now “very cornerable.” We will know shortly if this is true and “who” did the cornering. I suspect we will find out that this has been a Chinese/Russian hand holding consortium and one that was carefully planned and done within legal bounds. I think we will find out they in fact did play by the West’s rules and it was the “sellers” of nonexistent metal who fell into their own price fixing trap. It has been a financial war, one that was declared by the West and looks to have been possibly won by the East.

I have many questions about this transaction and very few answers. We may or may not ever get some of the answers but here is what I’d like to know. Was the gold which was delivered the “original” gold that was deposited? Same serial numbers and hallmarks? If not, where did it come from, who refined and processed it? And when? One must also wonder why the Germans did not get their promised gold. Did Holland work out a deal prior to the German request? Or is this a case of the Dutch “smelling smoke” and quietly exiting the theatre before anyone else? Other questions might include whether or not any of this gold was of Ukrainian origin and now what might happen in the derivatives markets? Remember, derivatives outstanding are probably in the range of 100-1 versus the real metal, taking 122 tons of “collateral” away could affect 12,200 “tons” of paper derivatives. With the leverage factor, this is equal to better than 4 years’ worth of global production and could affect close to $1/2 trillion worth of paper contracts! While on this subject, prior to the Dutch news, GOFO rates were at almost record backward levels. Has this come about because 122 tons of “collateral” was withdrawn from the pool? Just thinking out loud here…

Other notable events this past week were many. First, Congress began questioning the banks on “manipulating the commodities markets,” and the Federal Reserve leaking inside information to Goldman Sachs, is the timing of this a coincidence? Also, President Obama unilaterally has now thrown our borders open, is it possible that the long spoken of “Amero” is really in the works? One necessity to a North American currency unit would be open borders right? Again, just thinking out loud. We also heard Russia announce a decline to import ANY GMO food products from the West for at least 10 years. They also announced the import of another 55 tons of gold for the quarter for good measure while ISIS announced their intent to use gold and silver as money.

To tie all of this up, let me say that I believe the very long anticipated “market corner” of precious metals may possibly and finally be at hand. Contrary to what happened back in the late 1970’s with the Hunt brothers in silver, the current “corner” was actually facilitated by the sellers. The Hunt’s in fact did set out to corner silver, I don’t believe the Chinese/Russian/Indian alliance initially set out to do this …they were “forced to.”

You see, we have been in a “financial war” for years, the U.S. has trod heavily on the rest of the world financially. We settled our grotesque annual trade deficits by sending freely created dollars as payment. In order to support the dollar and keep interest rates low, we have suppressed the prices of gold and silver. Without low metals prices, none of the other markets could ever make any sense. PE ratios could never be at the current levels without low interest rates, interest rates could never be at these low levels if gold and silver were shooting upward …so the rest of the world has played the only card they could to prevent a World War, a financial card.

They “carried” us and let the game go on and on as they accumulated bigger and bigger stacks of gold. Much of this gold “was once” Western gold. They have legally purchased it and in many cases sent our own dollars back to us as payment. Now, we will sit with lots and lots of dollars while they have lots and lots of gold. I believe they have now cornered both COMEX gold and silver if they choose to stand for delivery. They will say “hey, we did not make up the rules, you did. You sold us contracts, we bought and paid for them. Now we would like the contract settled, please send us our metal”. This was all legal and they did not step up with the intent of busting the market, they simply “bought what we were selling.” If they do stand for delivery, can they be faulted if they ask for the contract they paid for to perform?

Let me finish by saying this, we very well may wake up after Thanksgiving “fat and happy” only to find out the entire financial system was a fraud. The East, by asking for delivery may in a “polite” way expose the entire game. This would accomplish much, first and most importantly, this will go almost all the way in ending the dollar as the world’s reserve currency. The U.S. will no longer be able to trade “something for nothing.” It will also hamper our ability to financially and militarily put our thumb on the rest of the world. If we became hampered financially, this would also make military operation much more difficult to fund or pay for. In essence, if I am correct and we do see failure to deliver and a COMEX default …the world may be a safer place! This past week for example, President Obama secretly extended our stay in Afghanistan, how will this operation be funded by a bankrupt Treasury and a central bank that issues unwanted currency? The Chinese/Russians in my opinion may be on the verge of winning a war without ever firing a shot and playing the game by our own rules! We clearly have been the aggressors in both Syria and then in funding a coup in Ukraine. Could crashing our financial markets be a way to put us on a financial leash and thus lessen our abilities at aggression? I am sure this thought process has already been discussed.

Please do not call or write me Monday morning and say “see, nothing happened …again.” All I am saying here it that the COMEX is now “cornerable” and in a very vulnerable position. Maybe it will not be now, maybe it will? All I can say is history is rife with “bank runs,” sooner or later the longs will stand for the delivery of an inventory too small to satisfy them, this will be nothing different than a bank run when it happens.

133 Comments

Rodger
on November 24, 2014 at 11:32 am

Awesome, awesome, awesome article. I “shared” on face book.

One can almost “sense” something is different…and I love how you connect the dots.

It’s sad that our impending vindication is so unlikely to bring a safe and happy World to enjoy.

Keep up the great work and thanks again.

Maurice (UK)

Bill Holter
on November 24, 2014 at 11:55 am

Thanks Maurice, you are not nuts.

RF
on November 24, 2014 at 11:45 am

Bill,

Whether or not it happens on Monday after Tanksgiving matters not as it can not be far off. You have educated those of us that were willing to learn very well and we all known what is coming; we just don’t know the date.

I believe this holiday season to be with family and enjoy it may be the last for a while as next year we may all be struggling to just get by.

I am thankful for being able to be with family and will count my blessings.

Happy Holidays to all!

Bill Holter
on November 24, 2014 at 11:54 am

and to you and yours Farrell. I will have a piece tomorrow talking about exactly this subject you mention. this may be our last “normal” Thanksgiving.

Rob
on November 24, 2014 at 11:55 am

Hi Bill – Thanks for another great article. WOW! This could be big…

I have a quick question – on the COMEX, Do the Short/Long operations have to be equal? Meaning if someone buys long, there has to be someone with short to sell? Also, how does the dumping of big sums of metal on the market work with the long/short equilibrium? Does the excess sit there until someone takes the other side of the operation? Just making sure I understand…

Again thanks keeping me in the loop on the shenanigans!

Rob

Bill Holter
on November 24, 2014 at 12:00 pm

for a trade to take place there must always be a buyer and a seller, so yes there are always the same amount of longs as shorts. This does not mean the buyer must stand for delivery or the seller even has to have 1 ounce of metal to deliver. The rub comes if the buyer stands for delivery and the seller does not have any to deliver. This is the case I am trying to make in this piece, what happens if the longs demand delivery with not enough metal to satisfy the demands?

Rob
on November 24, 2014 at 12:34 pm

Ok, that make much more sense. Thanks Bill!

Rob

turtle
on November 24, 2014 at 3:33 pm

Further on this: Usually contracts get closed out (or rolled over which is essentially the same for the spot month) whereby the “longs” sell their position back to the “shorts” so that both parties avoid delivery (taking or making).

My question for Bill is: When is the DEADLINE for this closing out to happen after which existing positions are COMMITTED to delivery. I understand the process starts on Monday but is the closing out deadline then past or do they have the rest of December to closeout and still avoid delivery?

Bill Holter
on November 24, 2014 at 4:07 pm

they are supposed to be settle before the end of the month, last year it did not look like they completely settled for a couple of months!

turtle
on November 24, 2014 at 4:17 pm

Thx for the speedy reply but this is still unclear.

Specifically, if you have an open position on 1st December and are called on for delivery, are you still able to close out this position during December?

Sorry if I seem obtuse.

Bill Holter
on November 24, 2014 at 4:25 pm

not obtuse, yes I believe you can accept a cash settlement from the short if you are the long. If you are the short seller, it used to be “no”, if you are called for delivery you had to deliver. Now, this seems to have changed and COMEX added cash delivery. I have not seen this in contractual form but several have told me it exists. All I can say is that “cash settlement” means you are trading cash rather than gold or silver …what’s the point?

turtle
on November 24, 2014 at 4:48 pm

I think I found my answer here in Turd’s article: “In order to stand for delivery in any month, one must provide 100% margin by First Notice Day and indicate your desire to take delivery of your gold. Additionally, and this is very important, the contract continues to trade through the delivery month and anyone willing or needing to “jump the queue” can appear on any day, provide the full margin, buy a contract and then stand for almost immediate delivery.”

My point is that the shorts can still buy back their contracts (or longs can sell) to avoid delivery until the end of December so we need to monitor open interest throughout December to see what actions the longs will be taking.

This would be closing out the position (before expiry) and is different to cash vs physical settlement (after expiry).

Certainly the market is still “cornerable” but this has been the case for many years now although perhaps not to this degree.

There are numerous rumours that metal deliveries in comex are strongly deprecated (except for big players like jpm or others) !

Moreover, I think that there are force majeure clause where settlements are so made in dollars exclusively.

Lastly, fekete wrote years ago that it was china was behind the short position, as JPM were just acting for the chinese interests and why cftc never said anything wrong with such massive position (inherited namely from bear sterns).

I would be very surprised because brics team do not appear to be very ready : not yet their own swift system, their barter exchanges platform neither…

It looks a little premature but I could well be wrong of course….

Anyway, thanks for your inputs !

Sneed
on November 24, 2014 at 1:01 pm

This must play our some day but I doubt it will play out as presented. The Chinese & Russians know they are playing with a mad skunk and that taking any action that would sufficiently rile the skunk would result in an escalation of hostilities. That’s a given. So it is far more likely to play out in some kind of unknown negotiated fashion that does not incite the insane warmongers of dc to pull yet another trigger. Or at least that is how I see it.

I want it to end as much as any investor in the PMs but I don’t want it to end with a thermonuclear war and the buffoons running the show do not appear to care and would actually seem to prefer a red hot conflict. If they get their wish let’s hope they are among the first to be incinerated, as unlikely as that may be.

What a joy and pleasure it would be if COMEX didn’t matter a damn, wouldn’t it? Add to that a practable means to completely ignore the Fed in the same process and financial ‘Nirvana’ would come into view!

Seeking debate on pros and cons geared toward feasibility of using this concept to effectively raise the purchase power of silver to 100 (‘dollar’ valued) ‘Coppers’ by private exchanges on historic ratio standards which circumvents bullion bank ‘decree’, with ultimate goal envisioning complete replacement of ‘currency scheme’ by private Weights and Measures in fully fractional divisions (‘halves’, ‘quarters’ and tenth ‘Coppers’).

Additionally, in time, Metals Bourse Warehouse Bearer’s Receipts could be offered on vaulted reserves to compete with banknotes, and renewed offerings of Real Bill Discounting to merchants and sub-producers of goods, along with standard ‘debit card’and checking services could be arranged for vaulting customers.

There are also very attractive Freedom aspects of this concept in Law as well, depending on how participants structure the commercial details of their lives.﻿

Bill Holter
on November 24, 2014 at 6:39 pm

summed up by saying …real and fair weights and measures are necessary for a society to exist in Liberty.

T
on November 24, 2014 at 1:57 pm

If this does play out I would love to be a fly on the wall when they offer to pay in USD’s.
I can hear it now. “You want to WHAT?. Ummmm arent you guys the ones threatening to take us off the SWIFT International payment system?”
That was the “foot shoot” heard across the world. ; )

What scares the s— out of me is that similar predictions have been published today by others, and for the 4 years I have been following this, that has never happened.

A few weeks ago, Eric Sprott predicted gold at $2,000 and silver, if I remember correctly, at $50, THIS YEAR, and there’s only a little over a month to go. Could it possibly be he was right? If so, then where do they go next year? I own both, so I feel fairly safe, but very nervous.

Bill Holter
on November 24, 2014 at 3:58 pm

I’m not saying for sure it will happen but if it does, $2,000 gold and $50 silver will be hilariously cheap!

I appreciate your no-holds barred approach to these times. Given the opaqueness of the machinations of the criminal cartels behind all the nonsense we are seeing today, it’s refreshing to see someone willing to think ‘outside the box’

One question that occurs to me over this entire Comex situation is the question of what the cost basis is for all this open interest. There is a view that the downside to these markets is greater because these positions are underwater. On the other hand, through the shorts and covers and rollovers, I wonder if the cost basis is now actually higher than that view would support. The higher the cost basis for these contracts, the less underwater, the less selling pressure one might expect.

I would also share my understanding that most of these contracts can now be cash-settled, certainly the newer ones, in lieu of taking delivery of physical. I have long maintained that, in physical terms, the Comex has ALREADY DEFAULTED, having done so, the first time they settled in cash iirc, 2010. But, just as the ISDA changed the definition of DEFAULT in their debacle with the Greek Bonds a few years back, the Comex, deep-pocketed as it is, MUST ENDURE as it is the Pricing Mechanism for the metals prices worldwide. The cartel could never let go of that control lever.

Keep up the good work. Together we will Win the War.

Happy Thanksgiving,
Sovereign-Economist

Bill Holter
on November 24, 2014 at 4:01 pm

Happy Thanksgiving to you S.E., yes, the COMEX says they can settle in paper apparently but like you said …isn’t this a default?

Oldfood
on November 24, 2014 at 2:15 pm

You have shown us towards the smoking embers. Where there is smoke, there is eventually fire. It will smolder until it reaches the kindling point and as you point out, that may be sooner than anticipated. Flames eventually follow and perhaps a conflagration, perhaps even a firestorm. Am I just being paranoid?

Bill Holter
on November 24, 2014 at 4:02 pm

not paranoid, you just see the potential of the situation.

Outlookingin
on November 24, 2014 at 2:18 pm

Thank you so much for connecting the dots Bill. Despite sanctions against Russia, France is preparing to turn over the first of two Mistral carriers ordered by Russia. Could it be coincidence, that today Russian troops boarded the first carrier? To set sail for Russia this week? Curious.

Bill Holter
on November 24, 2014 at 4:03 pm

the timing of many things today are unfortunately and probably no coincidence. We are as your name suggests, “outside looking in” and trying to decipher the best we can from the little we can actually see.

dishman
on November 24, 2014 at 5:55 pm

How about the timing of the Yuan hub in Los Angeles?

(Reuters) – China’s Industrial and Commercial Bank (ICBC) signed a pact with the Los Angeles city government to promote cross-border yuan trade and set up an offshore renminbi center in California, the bank said on Saturday.

Excellent work connecting the dots, thank you…
Sure is getting interesting out there.

Super article Bill. I especially like your investigative work that reveals: ” I think we will find out they in fact did play by the West’s rules and it was the “sellers” of nonexistent metal who fell into their own price fixing trap”. I believe that to be the foundational point of your great article.
The Bible says in Psalm35:7,8 “For without cause have they hid for me their net in a pit, which without cause they have digged for my soul. Let destruction come upon him at unawares, and let his net that he hath hid catch himself: into that very destruction let him fall”.
That was a Psalm of David when was fleeing for his life – before he was made King over Israel. So, we know how God enabled him to prevail over his enemies to become the greatest King Israel ever had. I think victory for honest money is not far away also. God bless

Bill Holter
on November 24, 2014 at 4:05 pm

Thanks and God bless you too Richard.

Sally A
on November 24, 2014 at 4:11 pm

At this time of thanksgiving, I am thankful for this cutting edge analysis. And Bill, your comments serve to further round out the picture.
I for one am ready for the fleecers to meet their maker.

Bill Holter
on November 24, 2014 at 4:14 pm

welcome Sally, we will all meet our maker sooner or later …it is the judgment part that counts!

Jeremy
on November 24, 2014 at 7:04 pm

Thank you for sharing Bill. May the Lord sustain you and continue to bless you with insight to share with others.

Like Charlton Heston once said at a National Rifleman’s Association… “From my cold dead hand they can have my gold!”

Of course, he didn’t say gold… He was in fact talking about his rifle, but the principle holds true.

W.

Bill Holter
on November 24, 2014 at 7:37 pm

yes, hang on for dear life!

Theravaida
on November 24, 2014 at 7:46 pm

Hi Bill,

This is what you wrote almost exactly 1 year ago (Dec. 2, 2013). I believe it was the first delivery day of December that year.

/something-must-happen

According that post, the situation was already very precarious & COMEX had been cornered. COMEX was supposed to have defaulted as a price discovery mechanism 1 year ago.

Can you please explain what exactly is the difference between the cornering 1 year ago & cornering now?

I’m not accusing you of “crying wolf”. But I’m confused about how this game possibly prolonged for 1 more year, if you called on it to snap 1 year ago.

Bill Holter
on November 24, 2014 at 8:05 pm

as of today there is an extra 23,000 contracts outstanding (2.3 million ounces) than there was then. I said it was precarious then and am saying it is more precarious now. Please read my last paragraph to the article, then understand that a hole, huge, giant, gigantic, enormous ….$1 billion could take out the COMEX gold registered inventory right now…same for silver. We are talking about $2 billion to ruin confidence in “$! quadrillion+” system. How’s that for leverage? To answer your question, the game has been prolonged because no one pulled the hair trigger yet.

Theravaida
on November 24, 2014 at 8:25 pm

Right, and I’m only wondering if we could possibly be sitting in similar situation 1 more year from now & discuss “COMEX has been cornered” on Nov. 30, 2015!?! 😉

If nobody “pulls the hair trigger”, even though they’ve had capability to do it for so long?

I mean, we had physical exchanges open in Shanghai, Singapore, Dubai in the interim, but still COMEX continues to chug along. It’s incredulous.

My frustration is not directed at you personally. This basically boils down to “somebody pulling the hair trigger”. That is the key, and I’ve gotten extremely frustrated at them not pulling that hair trigger for so long.

Bill,
Thanks for posting this link to the article. It was very thought provoking. I wonder how much of the $4.6 billion that Russia will get from the EU/IMF deal for natural gas (signed Oct 30th) will be used to buy gold. The Russian central bank bought 18.7 tonnes of gold in October (about $710 million). Maybe a billion dollars of gold in November.

Bill Holter
on November 25, 2014 at 7:31 am

probably as much of it as they can.

Odd Job
on November 24, 2014 at 8:06 pm

It wont matter much if the COMEX defaults, as the CRIMEX will just settle the trade/pay-out the contracts in cash… and the rest of the DayTraders just want to trade paper anyways.

Bill Holter
on November 24, 2014 at 8:31 pm

I disagree Odd Job, while the traders might not read anything into a default, other questions will be raised, not the smallest of which “is there any gold left in Ft. Knox?”. Confidence will break overnight if COMEX does indeed default and go cash settlement.

jor
on November 25, 2014 at 8:12 am

Thank you for a good and qualified explanation!
Still there remains one question:

As far as I know the Comex has been protected by a mechanism that allows the organisation to modify the rules. They did this at the time of the Hunt Brothers’ silver raid by simply declaring some new rules, which made it very expensive to deal with futures. Isn’t this a cheap method to get rid of raiders?

Bill Holter
on November 25, 2014 at 8:15 am

you are correct jor, the rules can always be changed as they were for the Hunt brothers. The difference now is that the Hunts were the ones levered on the long side, now the shorts are levered AND nake on the short side. Let them change the rules, this will only expose the fraud and crack confidence open like a watermelon.

I have read a lot about this and people seem to emphasize the fact that the Swiss central bank would have to buy 1700 tonnes of gold over the next 5 years. However, I think the most important part of the initiative is the requirement that the 300 tonnes of Swiss gold held somewhere in the UK and Canada must be immediately returned to Switerzland. This could quickly expose the lie that the gold is actually available. What happens when there is no gold to be had? The whole fraudulent scheme is exposed, as you point out about the COMEX situation. That is what I think makes the central banker the most worried.

Bill Holter
on November 25, 2014 at 7:24 am

actually, Monday is the day after the referendum vote as it will occur Sunday Nov. 30.

China and Russia are not setting up proxies. You’ve been listening to too much Harvey Organ non-sense.

If you really pay attention, China is WAY cozier with the U.S. than you could ever care to admit to–in fact, they are closer to the U.S. than to Russia. Yeah, I know, Gazprom 400 billion deal, etc.

But how about the number 3 trillion in U.S. reserves? How about there is no way China does well without U.S. imports?

You think China is really going to blow the lid on this quite happy relationship? Take dollars for gold! Sure, why not diversify a bit–it only makes sense.

But no, China nor Russia will be ending the COMEX non-sense, EVER.

The the outside reversal days was just JP Morgan and GS deciding it was time to let gold and silver finally go up a bit before all the miners go B.K. and stop growth cap-ex forever.

That is all the outside reversal days were about. GS and Chase about to make a mint on a short term bounce in PM’s.

As for the OI, that is normal if you think about it. JP Morgan unloaded their shorts, you’ll now start to see OI dip as well. Remember, all this is pre-planned and JP Morgan is in complete control.

Hence, Chases’ record low silver short position.

So yes, gold and silver will go up. But then they will go down again too.

That is all.

Bill Holter
on November 25, 2014 at 7:26 am

“China is WAY cozier with the U.S. than you could ever care to admit to–in fact, they are closer to the U.S. than to Russia”………………… and free Skittles for your pet Unicorn!

Mike
on November 25, 2014 at 7:48 am

The western world thought they were putting one over on China by having them do our manufacturing for a fraction of what it costs to do it in North America.

That decision based on the greed of the West ended up being a bad decision.imho

The West handed China an opportunity to position itself as a financial power.

Regardless of the problems in China with the corruption there the situation is that they have likely become much more powerful than they were a few decades ago, and now it would appear that they have MUCH MUCH more physical gold than the West.

As the fiat currency systems do what they have always done in the past (fail)The Industrial Military Complex will not be able to find the necessary funding to maintain power because the demand for greenbacks is about to take a major hit.

No demand for Greenbacks means no ability to financially fund the military system.

You can tell yourself that the new world order is not reality but the evidence seems to be building that a re-balancing of power is underway.

Bill Holter
on November 25, 2014 at 8:04 am

yes Mike, we will fail because our system is based on fake money.

A little knowledge
on November 24, 2014 at 10:56 pm

Thanks for the great info Bill!

Unfortunately, I don’t think there’s any way there will be a default alone.

Either
1) they will be rolled forward (with some other type of payment being made behind the scenes)
or
2) something will blow up somewhere in the world and distract everyone. & I don’t mean a financial blow up.

I don’t really understand it well enough, but if 1) occurs, how could the market function normally going forward? – I don’t know.

But we/re gonna find out – soon.

Best of luck, to all of us.

Bill Holter
on November 25, 2014 at 7:28 am

markets would not be able to function after a COMEX default, and yes, I have believed for a long time “it can’t just happen on its own”, there must be an outside event (false flag?) to point at as to “why” there was default.

turtle
on November 25, 2014 at 3:52 pm

Let’s not forget the referendum on the Swiss Gold Initiative this weekend. A majority “yes” vote there would be a further catalyst… and give the elites someone to blame…

Bill Holter
on November 25, 2014 at 5:15 pm

I cannot see any way it comes out as a yes.

turtle
on November 25, 2014 at 6:16 pm

Unfortunately, I have to agree. Through the support of the MSM news outlets, the SNB has been scare-campaigning heavily against it, getting around the Swiss referendum rules about no TV or radio advertising.

And even if the yes vote did win a genuine majority, it would be hard to imagine this elite stronghold (Switzerland) admitting it.

they have shut down Pay Pal contributions, prevented the yes side leader from the debate and if a yes vote were to win …it will be “Scotland’d” anyway.

Goldbug
on November 24, 2014 at 11:32 pm

Bill:
I, too, have some apprehension that things could really begin unraveling on Monday. Another thing I’ve been thinking about for some time is how long you think TPTB will allow sites like this to exist. Do you and Andy ever worry that you may be silenced at some point?

Bill Holter
on November 25, 2014 at 7:29 am

could happen.

Theravaida
on November 25, 2014 at 12:00 am

Bill, what happened to all the earlier comments on this post, they vanished? I communicated with you back & forth myself, but don’t see those comments anymore.

Bill Holter
on November 25, 2014 at 7:30 am

click on “older comments”.

Walter
on November 25, 2014 at 2:06 am

Isn’t the option expiry for Dec 14 contracts on the third Friday of December? Btw it’s 54,129 right now, down -7,634.

Why November 28?

Bill Holter
on November 25, 2014 at 7:35 am

Nov. 28 is 1st notice day and any open contracts must have full margin behind them. Generally 80+% of what is still outstanding on 1st notice day actually demands delivery. The 3rd Friday of a month is for stocks, not commods. 54,000 contracts is 270 million ounces versus 65 million in inventory.

Walter
on November 25, 2014 at 12:51 pm

Got it, thanks Bill.

Victor
on November 25, 2014 at 5:16 am

I totally agree with you that “this is my most important writing ever!”; typically, your logic is incontrovertibly true. I would like to propose my hypothesis for the resolution of this conundrum.

On September 19, 20145, China’s Peoples Bank of China (PBC) has established the Shanghai International Gold Exchange (SGEI), which buys and sells gold on a “Cash and Carry” basis. The SGEI price for gold is based on the gold’s paper Spot Price. Before January 2015, the PBC with establish a single long-term Renminbi Yuan price for a gram of gold for the next 100 or more years. This action will inaugurate the Renminbi Yuan currency “as good as gold”. The Renminbi Yuan will then be a perfect substitute for gold, which also includes many advantages.

Also before January 2015, both COMEC and LBMA will be terminated, and China’s financial infrastructure will replace them. During 2015, the following will occur: All global Central Banks will be nationalized by their respective countries. All sovereign currencies will be gold-backed by the use of the Chinese Yuans as collateral placed in escrow reserve accounts.

Lastly, the PBC’s State Administration of Foreign Exchange (SAFE) will fix the currency exchange rates for all sovereign gold-backed currencies. All current debt-based Fiat currencies will be terminated. The major “to large to fail” banks and financial institutions will also fail before 2016.

Bill Holter
on November 25, 2014 at 7:36 am

interesting thoughts Victor.

Mike
on November 25, 2014 at 6:39 am

Awesome piece Bill.

I agree with you that the scenario you offered is logical and without much doubt this week will move us again that much closer to a physical default.

The truth of real money is the truth however they try to cloud the issue.

Sound money principles will return and when they do the values of precious metals will be much more difficult to manipulate.

One sleeps better at night with silver bars under ones mattress.lol

Lumpy but at least I know my mattress has a solid foundation.

Pardon the pun.

Mike

Bill Holter
on November 25, 2014 at 7:37 am

good one Mike!

Jack
on November 25, 2014 at 7:31 am

ROFLMAO, the short sellers that slam the price every morning–like RIGHT NOW–look really scared. LOL.

Jack
on November 25, 2014 at 7:36 am

Gold just lost 8 an ounce in a single minute. ROFLMAO. The paper short sellers look terrified.

look, no one knows the internal dynamics better that TPTB. You think they really will get cornered? That is NEVER going to happen.

Today’s price is proof. The typical slam down before U.S. stock opening is on like Kong.

Just wait until options expiration on Friday. You can bet gold will have one of the largest sell-offs since 2013.

Mark my words. THEY ARE IN CONTROL.

Bill Holter
on November 25, 2014 at 8:06 am

yes Jack …as you say, “the paper sellers”. We are now only talking about $1 billion inventory each for silver and gold. This is like a ham sandwich without any ham or cheese.

silverdick
on November 25, 2014 at 11:11 pm

Hey Jack you mean TPTB are in control of Putin and Obama could it be ??the rest is just a shit show for us to beg for a single world currency ,I think you on to something

I think the Dutch bartered the gold for a promise of silence on what really happened with MH17, the Malaysian airliner that was downed over Ukrainian territory by Kiev on the orders of the USA. A classical False Flag operation. Rgds. BV Johannesburg

Bill Holter
on November 25, 2014 at 12:04 pm

very possible in today’s “everything fraudulent” world?

Shark
on November 25, 2014 at 12:42 pm

OI for Tuesday’s December Contracts (Prelims)

32,871

Looks like 22K were chopped down.
Bill, what were the numbers at this time last year?
If 22K get chopped down again, I highly doubt there will be a default.

The one good news? There is only 2 days left but the amount that dropped was pretty damn huge.

Bill….is it possible that we could see a lighter trim tomorrow than in comparison of today? Maybe a net deduction of say 10K instead of another 22K?

I have a feeling that the final OI standing for Friday will be 4-5K contracts. It will take some silver out of Comex, but no default.

I think if we talk at the bare minimum 10K standing, THEN I might raise an eyebrow.

Bill Holter
on November 25, 2014 at 12:44 pm

we’ll have to see, gold still has 10 million ounces versus 870,000 in inventory. Will be interesting

Shark
on November 25, 2014 at 12:49 pm

YIKES! Didnt even think about GOLD! It looks like there ‘might’ be a chance to see some fireworks Friday of this week heading into next week.

If gold WERE to default, then that will expose the manipulation of both silver and gold…so either way, silver doesnt need to default..heck, gold will do it for its younger brother.

THanks for the update. Didnt even think about Golds OI for Tuesday. Duh on me

Bill Holter
on November 25, 2014 at 12:52 pm

let’s wait and see Shark, it will only happen when China and Russia believe there is no more to be had from the West.

turtle
on November 25, 2014 at 3:45 pm

“China and Russia”… I think that last comment says it in a nutshell. No need to strike prematurely while your advantage is growing. Time will tell.

Bill Holter
on November 25, 2014 at 5:16 pm

they will pull the trigger when they are ready, my point has been all along that they actually HAVE a trigger to pull.

Jack
on November 25, 2014 at 2:59 pm

makes you a bit of a nut job Bill. You are no longer admitting to just speculating…but are now completely dogmatic about China and Russia’s inevitable take down of the COMEX.

Good luck to that one. In the spaceland we live in, we plebs have no idea what is going on. We’re just just privy to the club rules.

Bill Holter
on November 25, 2014 at 5:14 pm

no, simple common sense, once they can no longer spend their dollars for Western gold then what good are dollars. As for the nut job part, you must be looney tunes for reading my work? Why waste your time?

Macray
on November 25, 2014 at 5:57 pm

@Jack, We can all see that you are not in agreement with Bill’s posts. That is fine. However, I am wondering, like Bill, why do you even waste your time reading Bill’s commentary? You have almost a billion other websites you can choose to visit and make better use of your time.
@ Bill, Bill, your commentary is excellent. Obviously if Russia, China or both pull the trigger on the Comex it would be considered an act of war against the US. Since we are in a currency, natural resource and Cold war with Russia anyway, they certainly would have no fears on pulling this trigger.
However, in my opinion, both China and Russia need to insure there is zero or very little gold available to purchase in the West. At that point, they are in a position to reset the Gold price to whatever they want. To maintain the reset price, they will need to be able to bid that price to the world.
On another note, Deutsche Bank (DB) in a recent released report referred to the Chinese government’s open market purchases of gold have been roughly 500 tonnes per year. I saw this in an article that Koos Jensen posted, https://www.bullionstar.com/blog/koos-jansen/total-chinese-gold-reserves-nearly-16000t/
Its about 1/3 down in the commentary posted.
Have you seen this figure posted anywhere before? Obviously the Chinese government would not provide this figure to Deutsche Bank, nor would they provide Non market purchase of gold either. Whatever the amount they are purchasing, when they can’t get it anymore is when they are in a position to win a war without firing a shot!

Bill Holter
on November 25, 2014 at 6:03 pm

no I had not seen this Macray, the numbers I had seen were imports through the Shanghai exchange which are estimated at over 2,000 tons this year. Possibly this number is open market purchases? And yes I believe you are correct and I have said all along, China will not move until they can see the bottom of our barrel. Thanks.

Macray
on November 25, 2014 at 6:08 pm

Bill, I had seen the Shanghai exchange indicated that the Chinese public demand in 2013 was almost 2200 tons of gold. Now I see that Deutsche Bank is suggesting that the PBOC is purchasing 500 tons on the open market. Who knows what they may be purchasing on the NON open market. But if there is any credibility to the Deutsche report, then China(the Chinese citizens and the Chinese Gov.) are buying 100 per cent of the world mine production alone in 2013.

Bill Holter
on November 25, 2014 at 6:36 pm

…then add in India.

Marco
on November 25, 2014 at 6:37 pm

Let me finish by saying this, we very well may wake up after Thanksgiving “fat and happy” only to find out the entire financial system was a fraud.

Nothing like having a stuffed animal ready to be slaughtered over a weekend..lol. There will be someone giving thanks but it sure wont be anyone who is still in the system if there is a reset.

There is an article that now the FRENCH may join the list of those asking for their gold to be returned. It seems like this will be the mantra going forward now that there is no gold to be had.

With the Swiss vote coming Sunday night, we could very well be on our way to a reset. Plus they are using Ferguson as a distraction to cover most of the rot in the system this week. All these events are planned and timed perfectly by those in charge. I do believe the FED may surprise us at the next meeting even if all hell does not break loose in the markets.

Bill Holter
on November 25, 2014 at 6:41 pm

we’ll see?

Theravaida
on November 25, 2014 at 7:21 pm

And just like that, December Open Interests in both gold/silver on COMEX evaporated today (Tuesday). POOF!!

So much for the cornering of COMEX. It’s turning out to be a non-event. This is extremely disappointing.

2 years in a row, at the same time of year, despite having ability to destroy COMEX price-non-discovery mechanism …. Whoever had such ability, refused to pull the hair trigger. And according to you, the 2014 cornering was even more precarious than precarious cornering of 2013. But it’s all coming to nothing.

Should we re-convene in 1 more year on November 30, 2015, and rinse-repeat the same procedure? (With perhaps situation then get even more precarious than 2014, but nobody pulling the hair trigger?)

Bill Holter
on November 25, 2014 at 7:35 pm

gold contracts have not evaporated yet, there is still over 9 million ounces with 870,000 in inventory. You obviously need some B-12 or something to raise your spirits?

Theravaida
on November 25, 2014 at 8:43 pm

Maybe. But after getting hopes raised high with posts like these and others, I’m now setting myself up to get them quashed anyway.

That’s because, for months **SILVER** was described to be the commodity which would break COMEX’s back. It was the silver open interest which had been building up cumulatively to abnormal positions, but gold OI wasn’t doing much.

And then all of a sudden on a critical day like today, the silver hope gets extinguished. I’m entitled to wallow in my disappointment, methinks.

Bill Holter
on November 25, 2014 at 9:28 pm

if you do not know WHY you own silver or why you should, maybe should not and maybe you should sell it all and put the capital into a safe FDIC insured CD? Do whatever helps you sleep best at night.

Theravaida
on November 25, 2014 at 11:38 pm

Haha, I know very well why I own silver & have no intention of selling it. And I’m not disappointed about that at all. Don’t know where/how the “safe” FDIC CD even entered into the conversation.

I said, I was disappointed by whoever was holding big silver OI not pulling hair trigger & bringing down the house of cards once & for all. There is a big difference between my disappointment & the disappointment you’re implying.

Anyway, we’ve gone back & forth for quite too long on this. You don’t need to respond to this anymore.

RD
on November 26, 2014 at 2:47 am

In my opinion, waiting for something in the comex pit to happen in gold/silver is an illusion.

Great job. I believe you have identified the correct weekend, but it may not be the correct year. Collapsing the system after black Friday will collapse the US economy and spirit. My money is on 2016 because the election would provide further chaos to the crumbling power.

Bill Holter
on November 25, 2014 at 7:33 pm

who knows?

Otter
on November 25, 2014 at 8:10 pm

I appreciate your courage to say “this is what I think” regardless. Americans today are taught not to do that.

Bill Holter
on November 25, 2014 at 8:45 pm

thanks Otter. I am sure I do not have it pegged exactly but something is coming and I believe in some resemblance to my thoughts.

RD
on November 26, 2014 at 2:48 am

Yes but not coming from a failure in comex deliveries imo.

Bill Holter
on November 26, 2014 at 6:48 am

part of the reason I wrote the article was to illustrate the 80 tons sold in 15 minutes was and is not available in inventory.

RD
on November 26, 2014 at 9:02 am

Yes futures market with possible settlement in cash and leverage is a fraud and this show has been running for 4 decdes now and no end in sight…
Their inventory too I agree !

Bill Holter
on November 26, 2014 at 9:10 am

$2 billion will take out both, deliverable silver and gold.

T
on November 26, 2014 at 5:52 am

Wanted to let you know if you dont already that when I went on Global Research this morning in the line up I saw your article.
My first thought was “Ok who is “piggy backing” on Mr. Holter’s work” but it is credited to you.
Its a great piece of work and Im sure glad it is getting that kind of exposure.
Thanks for all your hard work. I havent been subscribed for very long but I love coming here and being able to see it first.

Bill Holter
on November 26, 2014 at 6:47 am

thanks T, the article had a huge amount of reads. I did an interview with Greg Hunter regarding the article yesterday, will be posted later today.

The gold longs are going to be cornered Monday morning. First, Swiss vote a firm no. Then, all the OI going null as it is doing, plus option expiry, and then looking at price action today……

And you can see the mother of all smashes coming Friday/Monday. It’s going to be ugly.

Bookmark this post.

Snoopdog
on November 26, 2014 at 10:20 am

Bill…as you know Chuck Hagel just resigned as DoD Head after 2 years but we know that he was really fired. I know people in DoD agencies and they provided me his letter to DoD employees where he thanked them and lastly said “God Bless You”. Hagel is a God fearing man as we all need to be. The administration followed up by doing a public smear campaign on Hagel by saying “he wasn’t up to the job”, “he was incompetent”, etc etc. These DoD people tell me this is what goes on inside the DoD all the time. If you don’t do what you are told to do, they either fire you or put you aside elsewhere, smear your reputation and put someone else in that will carry out their hideous orders/directives. Maybe Hagel wasn’t going to war or start a war with Russia or China or do something to start a human worldwide calamity.

Your thought Bill?

Bill Holter
on November 26, 2014 at 10:50 am

yes, a fight between the warring and non warring factions behind the scenes.

but it does give an insight into how “the great money deception of our time” will end… and another group to blame when it does… Russia, China, ISIS, Swiss libertarians, evil speculators and now hackers… anything but psychopathic central bankers getting high on their own printed money supply.

Bill Holter
on November 26, 2014 at 3:39 pm

it’s been described as a “computer glitch”. On a side note, what is turtle doing with “rocket mail”?

turtle
on November 27, 2014 at 5:18 pm

🙂 oxymoron… need all the help I can get

Bill Holter
on November 27, 2014 at 7:19 pm

Ha!

CHX
on November 26, 2014 at 4:16 pm

Bill, it is my contention that CONeX can always settle in cash. If need be they will and it’s a papered-over default (not delivering the metal) and the crooks are off the hook. Will be interesting to see how this mess will be resolved (or rather how it blows up). Thanks for all you do. x

Bill Holter
on November 26, 2014 at 4:18 pm

…the problem is that the Chinese will not take paper when the real thing runs out.

CHX
on November 27, 2014 at 2:06 am

Yes, the Chines can end it anytime they want. As long as they are allowed to load up +1500T thru imports, they’ll tug along and let the shenanigans continue… China might well be also be a big paper-short on the CONeX as a proper “hedge”… We’ll probably never know the details on who did what and when. All I know this is not sustainable on several levels, so it will stop eventually. So I wait and continue stacking until the tide turns for good – it won’t be too long now in my opinion. Months, few more years at the best. They can clobber the PMs all they want, I don’t care anymore at this point, knowing where this is heading ultimately.
Thanks again for all, x

Bill Holter
on November 27, 2014 at 8:06 am

yes, like Jim Sinclair says …”crawl into a hole and pull a rock over it, and care not about price, only looking out once in awhile because you know what’s coming” (a paraphrase as I don’t remember the exact words)

T
on November 28, 2014 at 7:24 am

Mr. Sinclair is wonderful. I follow him closely.
I did a little curiosity research the other day when the small mine stocks got hit. The difference in the NYSE listed and the Toronto listed (same mines) seemed to be a bit unbalanced. If I didnt know better I would think that the NYSE (FEDS) were manipulating some stocks to discourage investment.
; ) (wink, wink, nod, nod)

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